Calcutta High Court
Brijmohanlal Rathi vs Smt. Gita Devi Rathi And Others on 8 November, 1990
Equivalent citations: AIR1992CAL67, 96CWN591, AIR 1992 CALCUTTA 67, (1992) CAL WN 591 (1992) 1 CAL LJ 1, (1992) 1 CAL LJ 1
ORDER Ajit K. Sengupta, J.
1. This appeal is directed against the judgment and order dated 26th August, 1988 passed by the learned single Judge on an application of the respondents/defendants under O. VII, R. 11 of the Code of Civil Procedure, inter alia praying for revocation of the leave granted under Cl. 12 of the Letters Patent. By the said judgment and order, the learned single Judge allowed the application of the respondents and dismissed the suit on the ground that it was a suit for land, which is situate beyond the jurisdiction of this Court.
2. To appreciate the contentions raised in this appeal, it is necessary to summarise the case made out by the plaintiff in the plaint.
According to the plaintiff, he was a partner along with some other defendants and one Ganeshlal Rathi of a partnership-firm named Venkatesh Steel Co. Out of the funds of the firm a building and land was purchased at 7 Hanuman Road, New Delhi for and on behalf and account of the said firm. Although the said premises stood and stands registered in the name of Ganeshlal Rathi (since deceased), the said premises were and are in fact an asset of the firm. The firm was dissolved by a deed of dissolution. Under the said deed, the plaintiff became entitled to, inter alia, the said premises. The respondents are in possession of the said premises in trust and for the benefit of the plaintiff. The respondents are denying and/or interested in denying the right, title and interest of the plaintiff in the said premises.
3. On the basis of the allegations contained in the plaint, the plaintiff has made, inter alia, the following prayers:
a) Declaration that the plaintiff under the said deed of dissolution is entitled to the premises No. 7, Hanuman Road, New Delhi.
b) Decree directing the first 8 defendants and each of them, their servants, agents and/or assigns to execute and sign all necessary documents and deeds and do all such other acts or things as may be necessary for registering the said premises in the name of the plaintiff.
c) If the aforesaid defendants fail and neglect and make default in executing any document or deed or to do any such act or thing as is necessary, the Registrar of this Court be directed to do so for and on behalf of the said defendants.
d) Perpetual injunction restraining the first to eight defendants and each of them, their servants, agents and/or assigns from in any way or manner acting in derogation of or in a manner inconsistent with the right, title and interest of the plaintiff under the said deed of dissolution to and in respect of the aforesaid premises.
4. At the hearing before us it has been contended on behalf of the appellant that the instant suit in fact and in essence is a suit for enforcement of the right of the appellant under the said deed of dissolution dated 13th November, 1976, described as the deed of retirement. The said deed, inter alia, provided that the partnership-firm Venkatesh Steel Co., of which several of the Rathi Brothers were partners, would be dissolved and the business would be carried on by the appellant Brijmohanlal Rathi alone and that he would alone be responsible for meeting the liabilities of the business. It was agreed by and between the Rathi Brothers that all the assets of the firm would be collected by the appellant and he should pay all the liabilities including the claims of the bank incurred in connection with the business of the firm. Our attention has been drawn to three clauses "which, according to the appellant, are the most important clauses of the said deed. These are reproduced hereinafter:
"Clause 1: The Partnership business between the parties hereto under the name and style of Messrs. Venkatesh Steel Company is hereby declared to have been dissolved by mutual consent on and from the 1st day of November, 1976 and the said business is to be carried on by the continuing partner alone as the sole proprietor thereof on and from the 1st day of November, 1976.
Clause 2: The retiring partners shall if necessary assist and render all help to the continuing partner in realising all or any assets not yet realised in respect of the said partnership business but the retiring partners shall not in any event be liable for any claim, demand, action or liability of the said business whatsoever.
Clause 4: The continuing partner shall pay all debts and liabilities of and in the said partnership business heretofore carried on by the parties hereto and the continuing partner shall be solely liable for all actions, claims, demands, proceedings, for all income-tax, sales tax and/or all kinds of demand' claims and liabilities whatsoever due and payable and/or subsisting up to the 31st day of October, 1976. The bank dues if any in respect of the said partnership business shall be paid by the continuing partner as the sole proprietor of the said business to be heretofore carried on by him after the dissolution of the partnership after adjustment of the value of the collateral securities in favour of the bank or banks in respect of the loans granted to the partnership."
5. On the basis of the aforesaid facts it has been contended that the premises in question being an asset of a partnership firm is not an immovable property and therefore the claim of the plaintiff in respect of the said premises is not a suit for land. In other words, the contention is that as between the partners, even immovable properties are to be treated as movable on the footing that the partners are obliged to sell all assets and then to apply sale proceeds towards liquidation of the firm's dues. It has been highlighted that United Commercial Bank in whose favour the mortgage has been created has already obtained a decree and under clause 4 of the said deed of dissolution, the appellant is liable to liquidate the bank's dues by collecting all assets of the firm and applying the sale proceeds towards liquidation of the bank's dues.
6. In support of this contention reference has been made to a decision of a learned single Judge of this Court in the case of Durga Devi Bhagat v. J. B. Advani & Co. Ltd., reported in 76 CWN 528. It is the contention of the learned counsel that in fact in the different clauses of the deed of dissolution mentioned hereinbefore, this right has been recognised and emphasised. The plaint, the learned counsel contends, if studied carefully, would clearly show that the heirs of Ganeshlal Rathi disregarded these clauses. In support of this contention, reliance has also been placed on a decision of the Supreme Court in Addanki Narayanappa v. Bhaskara Krishnappa, .
7. In our view, the principle that the shares of the partners in the firm's assets must be treated as movable property is not applicable to this case at all. The primary question in this case is whether the premises was or is an asset of the firm at all or it belongs to the defendants as the heirs of Ganeshlal Rathi, an erstwhile partner of the firm. This is not a case where an asset is admittedly a partnership asset. The matter has been put directly in issue by the plaintiff by alleging that the premises had been purchased out of the funds of the firm and that by virtue of the deed of dissolution the plaintiff became entitled to it The plaintiff has also alleged that the defendants are denying such title and are invading the plaintiff's right to the premises. A declaration is sought for in respect of the plaintiff's right to the premises.
8. The cases relied on by the plaintiff relate to the question of registration of a document transferring shares of partners in a firm inter se. These cases have no application to a situation where the firm itself is claiming property as belonging to it.
9.Even if the premises belonged to the firm, the principle laid down in Addanki Narayanappa (supra) that the share of the partner in partnership assets is to be treated as movable property is not a rule of general application. The question in that case was whether a document which transferred a partner's share in certain machines etc. to another partner required registration. It may be noted that there was no express reference to any immovable property in the document before the Supreme Court. In any event, in the later decision of the Supreme Court in Ratan Lal Sharma v. Purushottam Harit, , the Supreme Court after having considered Addanki Narayanappa (supra) has held that where by a document one partner becomes exclusively entitled to the partnership assets which includes immovable property, there is no longer a question of adjustment or division of partnership assets, but creation of rights in immovable property and therefore the document required registration.
10. The decision in Ratanlal Sharma's case (supra) has been followed in a recent decision of the Supreme Court in Lachhman Dass v. Ramlal, .
11. The decision in Durga Devi Bhagat (supra) has no application in this case. That was a case which decided that an award declaring the division of the firm's assets between the partners did not require registration. Here, the dispute pertains to the question whether an asset is the asset of a firm at all or not.
12. The law as it stands, therefore, is that documents dividing or allowing partnership property including immovable property between the partners inter se do not require registration except where the allotment is made of an immovable property exclusively to one party creating a right in favour of such allottee.
13. In this case the appellant/plaintiff is claiming that by the deed of dissolution all the liabilities and assets of the firm, including the premises, were transferred to him exclusively. Incidentally the deed of dissolution does not refer to the premises at all. In fact, since 1976, the plaintiff/ appellant has been carrying on the business of the firm as sole proprietor. Accepting the plaintiff's case as correct, by the exclusive allotment of the premises to one partner the premises does not lose its character of being an immovable property.
14. The next question is whether the suit is for land. It is contended that in the instant suit the appellant is simply asserting his right and is seeking to enforce the obligation of the respondents under the deed of dissolution. The dispute is not, therefore, plainly a dispute of land, with regard to the right of property in question. It is also well accepted that to determine whether a suit is a suit for land, the plaint alone has to be looked into ignoring the contentions of the defendant to determine the character and frame of the suit as observed by Kama, J. in Moolji Jaitha & Co. v. The Khandesh Spinning & Weaving Mills Co. Ltd., reported in AIR 1950 FC 83. Thus, if possession has not been claimed by the appellant, leave under clause 12 cannot be revoked on the ground that in future the suit might be converted into a suit for recovery of possession, i.e., a suit for land. Reliance has been placed on a decision of the learned single Judge of this Court in United Commercial Bank v. Sanatan Bastu Shilpa Pratisthan, .
15. In Moolji Jaitha's case (supra) the plaint contained the following prayers:--
"a) That it may be declared that the said land belong and are the properties of the plaintiff-company and that the defendants have no beneficial interest therein;
b) That the defendants may be ordered to execute all such documents and deeds and do such acts as may be necessary for transferring the said lands to the name of the plaintiff-company".
16. By the majority judgment the said suit was held not to be a suit for land, despite prayer (a) referred to above. It is, therefore, contended that on a parity of reasoning the instant suit cannot be regarded as a suit for land. The fact that in Moolji Jaitha's case (supra) possession was with the plaintiff is of no consequence inasmuch as in the instant case the appellant has also not asked for possession.
17. It is also the contention of the learned counsel for the appellant that the real point in issue in the present case is directly covered by the proposition laid down in the case Deb-endra Nath Chowdhury v. Southern Bank Ltd., . This was a suit'for specific performance of a contract without a prayer for possession. The facts of the present case are almost similar to those of the case referred to hereinabove. As in the said case, here also, the personal covenant of Ganeshlal Rathi, as contained in the said deed of dissolution, is sought to be enforced and nothing more.
18. It is then contended that in Debendra Nath Chowdhury (supra) the tests and principles laid down in Moolji Jaitha (supra) had been fully explained and applied. Three of the Judges who decided that case were definitely of the view that if only a personal covenant is sought to be enforced in a suit, such a suit is not a suit for land. This will be evident from the judgments of Kania, J. and Patanjali Sastri, J., who have held that the plaint in that case did not make it a suit for land. Mahajan, J. although of the view that the plaint was a suit for land yet held that in a suit for specific performance of a contract where no possession is being asked for such a suit cannot be regarded as suit for land. This is clear from the following extract of the judgment of Mahajan, J. at page 110 of the Reports in Moolji Jaitha (supra).
"Finally, I would like to say a word about suits for specific performance regarding which conflicting decisions have been pronounced by the High Courts in India. In my opinion, if the suit is for specific performance and a decree for possession of the land sold is claimed, such a suit would certainly be a suit for land; but if the suit is simpliciter for specific performance, i.e., for the enforcement of the contract of sale and for execution of a conveyance, in that event there can be no good ground for holding that such a suit is a suit for determination of title to land or that the decree in it would operate on the land."
19. It is also the contention of the learned counsel for the appellant that it is sometimes argued that suit for specific performance automatically becomes a suit for land by reason of the judgment in Babu Lal v. Hazari Lal Kishori Lal, . This view, however, clearly is erroneous. That was a case where an amendment was allowed at the execution stage by inclusion of a prayer for possession. The Supreme Court held that under Section 22 of the Specific Relief Act such a prayer should be deemed to have been included. The question whether such a suit should be regarded as suit for land was not at all considered and as such that judgment cannot be regarded as an authority for the proposition that even if possession is not asked for in a suit for specific performance of a contract all such suits should be regarded as suits for land.
20. Learned counsel contends that the scope and relevance of the judgment in the case of Babu Lal (supra) was considered by a Special Bench of this Court in the case of Dhiraj Bala Kania v. Jethia Estate Pvt. Ltd., . Chittatosh Mukherjee, J. has clearly held that Court Fee would become payable on possession in a suit for specific performance of a contract for sale only if such possession is asked for and not otherwise. It is the contention that considerable direct support for the proposition that a suit for specific performance of a contract without possession is not a suit for land will be evident from the single Bench judgment in Sanatan Bastu Silpa Pratisthan (supra) and in Raj Kumar Singhama v. Benoy Kumar Mazumdar, .
According to the learned counsel for the appellant it, therefore, becomes indisputable that a suit for specific performance of a contract without a prayer for possession is not a suit for land and as such the application for revocation of leave on the basis of the above authorities is totally misconceived. The decision Moolji Jaitha (supra) has been explained and applied by P. B. Mukherjee, J. in Debendra Nath Chowdhury (supra) which has not been overruled or even disapproved; hence this appeal should be allowed.
21. The learned counsel for the respondent has, however, supported the decision of the learned Trial Judge.
22. We have given our anxious consi-deration to the rival contentions. We are, however, unable to accept the contention of the learned counsel for the appellant that the instant suit is not a suit for land.
23. The principle that suits for specific performance simpliciter are not suits for land merely because they affect a change in the title to land is not applicable here. If suit is simpliciter for specific performance then there is no dispute with regard to the title to the land and the plaintiff while accepting the title of the defendant merely asks the defendant to transfer such title by execution of a conveyance. In this case the title of the defendants to the premises is admittedly disputed by the plaintiff. The appellant/ plaintiff is claiming title to the premises. The appellant/plaintiff also stated in his plaint that the defendants are disputing such title. This is not a case of specific performance simpliciter. The primary and only object of the plaintiff in the suit is to establish his title to the said premises and have possession and control of the same. It is well settled that a suit is a suit for land which primarily and substantially seeks adjudication upon title to immovable property or a determination of any right or interest therein. Any decision in the suit would necessarily involve an adjudication on t:he right of the plaintiff to the said premises. If it is found that the relief cannot be granted without deciding the question of title to possession, control and management of land or other immovable property, the suit will be a suit for land within the meaning of clause 12 of the Letters Patent. The suit premises are admittedly outside the jurisdiction of this Court.
24. The case of Debendra Nath Chow-
dhury (supra) did not involve any question of title. In other words the title was undisputed. The plaintiff was merely claiming specific performance simpliciter by execution of the documents transferring such undisputed title from the defendant to the plaintiff. The observations in Moolji Jaitha (supra) make it clear that if a suit is simpliciter for specific performance, there is no ground for holding that it is a suit for determination of title. Here the question whether the premises belonged to the firm will have to be established before the plaintiff/ appellant can claim specific performance of any agreement to transfer the premises to him. Furthermore, the appellant/ plaintiff in this case has claimed possession or at least the determination of the right to possession of the premises. Prayer (d) of the plaint is for an injunction restraining the defendants/respondents from in any manner acting in derogation of or in a manner inconsistent with the right, title and interest eg the appellant/plaintiff in, respect of the premises. Admittedly, the respondents/ defendants are in possession of the premises. An injunction in this form would mean that the defendants/respondents cannot any further remain in possession of the premises and would have to vacate. In substance, the plaintiff by prayer (d) is explicitly claiming the determination of the right to possession of the premises.
25. On the facts of this case a clear claim for determination of questions of title and possession to the premises having been made, the decisions in Dhiraj Bala Kania (supra), Sanatan Bastu Shilpa Pratisthan (supra) and Raj Kumar Singhania (supra) have no bearing at all.
26. In Moolji Jaitha (supra) all the five Judges held that "a suit for land" covers suits for determination of title to and question of possession of immovable property. The facts of the case were that a company after terminating the agency of the defendants brought a suit for various reliefs founded on the alleged wrongful actions by the defen-dants such as taking of accounts etc. The Company asked incidentally for two reliefs concerning certain lands which were alleged to have been acquired by the defendants on behalf of the company. It is to be noted that the said lands since they were purchased had been used by and for the purpose of the plaintiff company and had been in the plaintiff's possession and occupation throughout. On a construction of the plaint, of the five Judges two Judges, Viz. Kania, C.J. and Patanjali Shastri, J. held that the declarations sought for in respect of the land were not the main relief but were ancillary to the main relief for accounts and, therefore, the suit was not a suit for land. Two other Judges, viz. B.K. Mukherjea, J. and Mahajan, J., however, held that the suit was a suit for land. The fifth Judge, Fazal Ali, J., did not decide on this point at all, but dismissed the appeal on different grounds. However, even Kania, C.J. and Patanjali Shastri, J. held that the ultimate question necessarily depends upon the construction of the plaint and the ascertainment of the real object of the suit. Their Lordships also held that if the primary or direct object is to claim possession of or an adjudication of title to land the suit is a suit for land. In this case, the main relief claimed and the primary object of the plaintiff/ appellant is to obtain an adjudication of title to the premises and for ousting the defendants/ respondents from possession of the land. Prayer (a) is for declaration of title. Prayer (d) involves the question of the defendants/respondents' right to possession of the premises. Prayer (b) and (c) are consequential prayers relating to the execution of documents.
27. The decision in Sanatan Bastu Shilpa Pratisthan (supra) was rendered by a learned single Judge of this Court in a suit for specific performance of an agreement and for cancellation of a letter. There in the plaint, the plaintiff had claimed to be and was admit-tedly in possession of a flat. The prayers were for execution of the conveyance and for an injunction restraining the defendants from dispossessing the plaintiff. The title of the defendants to the flat also was not disputed. The Court held that the prayer for execution and registration of conveyance was maintainable particularly when the plaintiff had claimed to be in possession of the flat. The Court held that the claim for injunction was a separate and distinct cause of action. On the ground that leave under clause 12 of the Letters Patent cannot be revoked if one of the prayers is maintainable, the Court dismissed the application for revocation of leave under Clause 12. In this case, all the prayers of the plaintiff relate to title/possession of premises outside the jurisdiction of this Court.
28. Special Bench decision in Dhiraj Bala Kania (supra) on which heavy reliance was placed by the appellant does not support the case of the appellant at all. The question before the Special Bench was whether a suit for specific performance of a contract for granting lease together with a prayer for delivery of possession of the suit property should be valued under clause (xii)(c) or under clause (v) of Section 7 of the West Bengal Court-fees Act, 1970.
29. In Babu Lal v. Hazari Lal Kishori Lal (supra) Supreme Court held that it may not always be necessary for the plaintiff to specifically claim possession over the property, the relief of possession being inherent in the relief for specific performance of the contract of sale.
30. On the other hand, in Hindusthan Gas & Industries Ltd. v. Adhish Chandra Sinha, , another learned single Judge of this Court held that a suit for a declaration for cancellation of notice to quit was a suit for land because "the real purpose of the plaintiffs for the suit is to affirm and continue tenancy of an immovable property which is situated outside the jurisdiction of this Court". In this case also the real purpose of the plaintiff is to determine the question of title to the premises and for possession of the said premises.
31. It may be noted that the entire case of the plaintiff/ appellant is that he is the person who is entitled to the said land and premises. It is the plaintiff's case that the defendants are in possession of the land and are denying and/or are interested in denying the right, title and interest of the plaintiff in the premises. In prayer (a), a declaration is sought in respect of the plaintiff's title to the premises; and prayer (d) is in fact and in substance a specific prayer for possession.
32. While it is well settled that only the plaint has to be looked into to determine whether a suit is a suit for land, it is equally well settled that the plaint will have to be properly construed to determine the real nature and purpose of the suit. That the claim of the plaintiff is for declaration of title to the premises and for possession is evident from a plain reading of the plaint. On the facts of this case and in the light of the principles as culled out from the decisions cited from the bar we have not been able to persuade ourselves to hold that instant suit is not a suit for land. The contention of the learned counsel for the appellant, therefore, must be rejected.
33. A contention was raised by the respondents/defendants that the suit is barred by limitation. This contention is based on the definition of the word 'Trustee' in Section 2(n) of the Limitation Act, 1963 which specifically provides that 'Trustee' does not include a benamidar. The plaintiff, it is contended, cannot take advantage of Section 10 of the Limitation Act, 1963. Dealing with this contention, the learned counsel for the appellant has submitted that in the plaint it is stated that Ganesh Lal Rathi was and upon his death, the respondents as the successors-in-interest of the said Ganesh Lal Rathi, were and are holding the said premises in trust and for the benefit of the appellant. The property having been purchased from the funds of the trust in the name of a partner, the property must be regarded to have been impressed with the trust and/ or an obligation in the nature of a trust. Reference has been made to Section 88 of the Indian Trust Act and illustration "D" thereto. Hence, by virtue of Section 10 of the Limitation Act, the appellant's claim cannot be barred by limitation. In any event, the cause of action only arose when the right of the owners under the said deed of dissolution was disputed. On that footing also the claim of the appellant cannot be regarded as time barred.
34. It cannot be disputed that Section 10 of the Limitation Act 1963, cannot be availed of by a plaintiff seeking to bring a suit against a benamidar. In Kerodemoney Dossee v. Doorgamoney Dossee reported in (1879) ILR 4 Cal 455 a Division Bench of this Court while construing the scope of Section 10 of the Limitation Act 1871 which, inter alia, provided that the persons beneficially interested in a trust created for some specific purpose or object, and property becoming vested in a trustee, may bring suit against such trust at any distance of time without being barred by the law of limitation, held that although the position of benamidars may be a fiduciary one, but benamidars are not trustees.
35. Let us now examine the case of the plaintiff regarding the purchase of the suit premises which is as follows:
"(a) During the continuation of the business of the said firm and with the consent of the plaintiff and the 9th and 10th defendants the said deceased (Ganesh Lal Rathi) with the funds belonging to the said firm duly purchased and acquired at and for the agreed consideration of Rs. 1,50,000/- the building and land at premises No. 7, Hanuman Road, New Delhi;
(b) The said deceased during his lifetime was and after his death the said defendants are in possession of the said premises in trust and for the benefit of the plaintiff....."
36. In Prem Ballabh Khulbe v. Mathura Datt Bhatt, , the Supreme Court held as follows (at page 1343) :--
"In the absence of special circumstances, he (the partner) cannot be regarded as a kind of trustee for the other partners or liable to render accounts to them in a fiduciary capacity."
There the Supreme Court has held that fraud or clandestine dealing must be alleged and proved before it can be held that a partner has acquired property which is held by him in trust for the other partners. In this case, as indicated earlier, there is no allegation of any fraud, nor there is any allegation of any fraudulent or clandestine dealing. On the other hand it is alleged in the plaint that the property was "duly purchased with the consent of the other partners in the name of the deceased." It is also admitted that the premises all along stood and stands registered in the name of the deceased.
37. Another contention has been raised by the respondents that the appellant has in fact claimed the said property on the basis of benami transaction. This has, however, been refuted by the appellant. But from the circumstances as appearing from the plaint and the pleadings in the affidavits, it is in essence a case of benami and not of trust. It is a case which is covered by Section 82 of the Indian Trust Act, 1882, which reads thus:
"Whether property is transferred to one person for a consideration paid or provided by another person, and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration." .
38. Section 82 of the Indian Trusts Act, 1882 gave statutory recognition to benami transaction. It has been repealed by the Benami Transactions (Prohibition) Act, 1988 (vide Section 7 of the 1988 Act). A benami transaction has been defined in the 1988 Act by Section 2(a) as meaning "any transaction for which property is transferred to one person for a consideration paid or provided by another person." This is precisely the case of the plaintiff, namely the consideration was. paid or provided by the firm for the said premises to be transferred to or brought by the said deceased. Therefore, the transaction is not one of trust, but of benami. Thus the provisions of Section 10 of the Limitation Act, 1963, will have no application.
39. Another contention has been raised that the suit as framed is barred under the provisions of the Benami Transactions (Prohibition) Act, 1988. According to the appellant he has not claimed the said property on the basis of any benami transaction, nor was the said Ganesh Lal Rathi recorded as a benamidar. His true position was that of a trustee and hence he and his successors-in-interest remained accountable to the partners and later by virtue of the said deed of dissolution to the appellant alone. This contention of the appellant cannot be accepted. The plaintiff as indicated earlier, specifically pleaded that the said premises had been purchased and acquired with the funds of the firm for and on behalf of and on account of the said firm, although the said premises stood and stands registered in the name of the said deceased Ganesh Lal Rathi.
40. "Partnership does not in itself create a fiduciary relation between the partners or make one of them a trustee for the other or for his representative." (See Halsbury's Laws of England, 3rd Edition, Volume 38, Article 1363, page 820). The Supreme Court in Khulbe v. Bhatt (supra) approved the aforesaid Statement of Halsbury; and held that unless there is fraud or clandestine dealing there is no question of the deceased standing in any fiduciary capacity towards the plaintiff. Nowhere in the plaint has it even been alleged that the deceased or the defendants/respendents stood or stand in any fiduciary capacity as far as the plaintiff is concerned. The claim of the plaintiff is a claim that the deceased was holding the property as a benamidar of the firm. The claim of the plaintiff to ownership of property standing admittedly in the name of another is a claim to enforce a benami transaction which is forbidden by the statute.
41. Section 4(1) of the Benami Transactions (Prohibition) Act 1988 specifically bars any suit, claim or action to establish any right in respect of any property held benami against the person in whose name the property is held or against any other person, by a person claiming to be the real owner of such property. As indicated, there is no fiduciary relationship pleaded between the deceased and the plaintiff or between the respondents and the plaintiff justifying the exception provided by Section 4(3) of the Benami Transactions (Prohibition) Act. Section 4(3) provides that prohibition of the right to recover property held benami will not apply when the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity. The mere fact of holding the property in benami is not sufficient to describe the holder as a trustee for the benefit of the real owner.
42. We may add that in Mithilesh Kumari v. Prem Behari Khare, , the Supreme Court considered the scope and effect of the Benami Transactions (Prohibition) Act, 1988. The Supreme Court was of the view that as a result of the provisions of the said Act all properties held benami at the moment of the Act coming into force may be affected irrespective of their beginning, duration and origin. This will be so even if the legislation is not retrospective but only retroactive. The Supreme Court held that all the real owners are equally affected by the disability provision irrespective of the time of creation of the right. The Supreme Court observed that if the statute comes into operation during the pendency of the appeal, the Appellate Court not only will take notice of such statute but shall also give effect to it.
43. For the reasons aforesaid, this appeal is dismissed with costs. All interim orders will stand vacated.
K. M. Yusuf, J.
44.I agree.
45. Appeal dismissed.